October 16, 2023

 

Indonesia and China expected to maintain strong buying of Canadian wheat in 2023-24

 

Canada's top two wheat customers are expected to be major buyers again in 2023-24.

 

The United States Department of Agriculture (USDA) is forecasting China will import 11 million tonnes of the commodity from all suppliers. That would be a drop from last year's massive 13.28 million tonne program but well above the five-year average of 6.5. million tonnes prior to last year.

 

Indonesia is expected to buy 10 million tonnes of wheat, up from 9.57 million tonnes last year and in line with the 2017-21 average of 10.7 million tonnes.

 

China and Indonesia accounted for one-quarter of Canada's bulk wheat exports in 2022-23, with China buying 2.97 million tonnes and Indonesia chipping in another 2.14 million tonnes. Both countries often vie with one another for top spot on Canada's customer list, and that pattern is expected to continue this year.

 

"We want to be a big part of both of those markets," said Leif Carlson, director of market intelligence and trade with Cereals Canada.

 

Canada's Canada Western Red Spring quality is a good match with China's domestic wheat and with imported product from France and Australia.

 

"China is a long-term, consistent buyer that does value Canadian quality," said Carlson.

 

The USDA's Foreign Agricultural Service (FAS) cited data from the National Bureau of Statistics of China (NBS) indicating that the country's summer wheat production fell 0.9% in 2023-24, the first decline in seven years due to heavy pre-harvest rains in key growing regions.

 

The NBS said wheat acres were up 0.4%, but yields were down 1.3%.

 

"However, a renowned agricultural firm's sample survey estimated summer wheat output (was) down by 10%," said the FAS. It estimated 22 million tonnes of the country's 136.5 million tonnes of wheat sprouted.

 

As a result, FAS is forecasting 37 million tonnes of feed and residual use, up from 31 million tonnes last year.

 

China purchased 9.4 million tonnes of wheat between January and August of 2023. The country is expected to exceed its annual tariff rate quota of 9.636 million tonnes for the first time.

 

Meanwhile, Export Development Canada said Indonesia should be a high-priority market for Canadian exporters going forward. The country's economy is expected to grow 5-6% per year over the long term.

 

Carlson said Canada's agriculture industry is well aware of Indonesia's potential.

 

"In the cereals sector, we have experienced some of that growth and opportunity in the Indonesian market that Export Development has written about," he said. He anticipates another year of strong demand for Canadian wheat from Indonesia in 2023-24, especially with Australia expecting a much smaller crop.

 

Canada will be visiting both Indonesia and China as part of its new crop missions to tell millers about the 2023 crop.

 

There are also incoming and outgoing technical missions to ensure millers in both countries know how to get the best value out of Canadian wheat.

 

- The Western Producer